Click-and-collect drives online sales growth for Woolworths Group

Dean Blake

2nd May 2019

Woolworths Group grew online supermarket sales 34.7 per cent year on year in Q3 FY19, from $273 million to $368 million.

Online sales, which now account for 3.7 per cent of total sales, were largely driven by the increasing number of customer utilising click-and-collect, increased capacity and a strong customer response to an online freezer sale held in March, the retailer said on Thursday.

The increase in click-and-collect transactions in groceries is expected to bring in a further $3.3 billion into the sector over 2018-19, according to IBISWorld.

“Consumers trust in online grocery shopping has taken time to develop,” IBISWorld senior industry analyst Tom Youl said.

“These trends greatly constrained revenue growth , despite the steady rise in the proportion of Australians who purchase groceries online. However, the introduction of click-and-collect services has opened up the market.”

Woolworths’ tech initiative, WooliesX, made further progress in driving “ultra-convenient, effortless and connected customer experiences” in Q3, with same-day delivery expanding to 56 stores, and more personalised search now available.

Endeavour Drinks, Woolworths Group’s liquor retail arm, also saw online growth in the period. Online sales grew 10.5 per cent, and now make up 5.2 per cent of total sales.

This was largely due to an increase in the segment’s on-demand delivery options, with 559 BWS stores offering on-demand delivery, with an average delivery time of under an hour, and Dan Murphy’s having rolled such an option out across 79 stores in the quarter.

Discount department store Big W saw its online performance increase significantly, with sales improving 167 per cent largely due to click-and-collect. Online penetration more than doubled compared to the previous year, contributing 4.1 per cent of total sales, rather than 1.8 per cent.

Countdown, the group’s New Zealand supermarket chain, also enjoyed increased online growth and penetration – improving 42.8 per cent, and 6.6 per cent, respectively.